Thanks for the prompt reply.
I deleted the web app and setup projects, re-installed UltiDev Cassini, and created a new project from scratch. It's another trivial web app that just says "Hello". Then I created a new setup project from scratch and I'm still having the same problem:
"Exception occurrred while initializing the installation: System.IO.FileNotFound: Could not load file or assembly 'file:///C:\WINDOWS\system32\Time' or one of its dependencies. The system cannot find the file specified."
When I click OK, this followed by another error:
"Could not find file "C:\Program Files\My Company Name\Setup1\Bin\UltiDevCassiniServerConfiguration.InstallState."
This happens whether I run the setup.exe or the Setup1.msi. I did remove the custom actions and the setup completes normally...but of course, no Cassini.